• How much to withhold from fortnightly, monthly or quarterly payments

    Once you have worked out the withholding amount for your worker's weekly income, you will need to work out the amount to withhold from each pay. To do this, you must convert the weekly withholding amount into a fortnightly, monthly, or quarterly withholding amount and then round the result to the nearest dollar. The following method is used:

    Pay period

    Instructions

    Working

    Fortnightly

    Multiply the weekly withholding amount by two.

    Weekly withholding amount x 2

    Monthly

    Multiply the weekly withholding amount by 13 and divide by three.

    Weekly withholding amount x 13
    3

    Quarterly

    Multiply the weekly withholding amount by 13.

    Weekly withholding amount x 13

    Example

    Marion's monthly wage of $2,070 is made up of a $950 CDEP payment and a $1,120 non-CDEP payment. She has claimed the tax-free threshold on her Tax file number declaration and does not receive leave loading.

    Step

    Instruction

    Result

    1

    Convert the monthly total payment into a weekly amount (total monthly income x 3)   13

    = [(950 + 1,120) x 3]   13

    = [(2,070) x 3]   13

    = 6,210   13

    = $477.69

    Disregard cents

    $477

    2

    Convert the monthly CDEP payment into a weekly amount

    = (950 x 3)   13

    = 2,850   13

    = $219.23

    Disregard cents

    $219

    3

    Use the Pay as you go (PAYG) withholding - Weekly tax table (NAT 1005) to find the worker's total weekly income in the 'weekly earnings' column (column 1).

    Total weekly earnings: $477

    In this example, we use column 3 to work out the amount to withhold.

    $51

    4

    Using the CDEP calculation table, find the CDEP weekly earnings amount in column A.

    $219

    5

    Using the CDEP calculation table, find the withholding reduction amount in column B.

    $16

    6

    Subtract the amount in step 5 from step 3; $51 - $16

    $35

    7

    Convert the weekly withholding amount into a monthly withholding amount [(weekly withholding amount x 13)   3]

    = ($35 x 13)   3

    = $455   3

    = $151.67

    $152 rounded to the nearest dollar

    $152

    The correct amount to withhold on Marion's gross payment amount of $2,070 is $152.

    Attention

    This example uses figures that are current for the 2008-09 financial year.

    End of attention
    Last modified: 22 Oct 2012QC 17754